US asks the court to reserve US Bank’s lawsuit against SL

It appears that the US government is considering to intervene in a lawsuit filed by Hamilton Reserve Bank againt Sri Lanka over a defaulted 2022 sovereign bond.

According to Financial Times (https://www.ft.com), the US Attorney for the Southern District of New York, Damian Williams, has sent a letter to the judge presiding over the case, Denise Cote, informing her of the government’s potential participation.

Sri Lanka has filed a motion to stay the litigation for a period of six months while it conducts sovereign debt restructuring negotiations with sovereign and commercial creditors.

The US government is asking the court to reserve the decision on the motion to stay until it has had an opportunity to submit a statement
of interest.

The US government’s decision to intervene in the case is significant and could have a major impact on the outcome of the litigation.

The US government’s interest in the case is not clear. However, some view that the US government’s intervention could be a delaying tactic to help Sri Lanka engineer a debt restructuring.

Hamilton Reserve Bank is a St. Kitts-based bank that holds a US$ 250 million stake in Sri Lanka’s US$ 1 billion sovereign bond that matured in 2022.

It has not agreed to participate in the debt restructuring negotiations and is instead seeking to collect its full amount due.

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